forensic audit of brampton mayor and councillors

8/12/2019 Forensic audit of Brampton mayor and councillors

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Forensic examination of

the Expenses of theMayor and Councillors

The Corporation of the

City of Brampton


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July 30, 2014

Private and confidential

City Council

The Corporation of the City of Brampton

2 Wellington Street West

Brampton ON L6Y 4R2

Dear Members of Council:

Subject: Forensic examination of the expenses of the Mayor and the Councillors

Attached is our report setting out the findings from our forensic examination of the expenses of the Mayor

and the Councillors.

Our findings are based on procedures completed as described in Section 3 and Appendix A and are

subject to the scope, limitations in scope and restrictions as set out therein.

We appreciate the opportunity to be of service to City Council.

Yours very truly,

Robert Fowlie, CPA, CAIFA, CFE

Forensic ServicesDeloitte LLP

Guillaume Vadeboncoeur, CPA, CAIFA, CFF

Forensic Services

Deloitte LLP

Deloitte LLP

33 Yonge Street2ndFloorToronto ON M5E 1G4Canada

Tel: 416-601-6200Fax: 416-601-6151www.deloitte.ca


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Table of Contents

1 Introduction and Background .................................................................................................................. 1

2

Summary of Findings .............................................................................................................................. 3

3 Scope, Limitations in Scope and Restrictions ...................................................................................... 11

4 Findings Councillors Term of Council Expense Accounts ................................................................ 13

5 Findings Councillors Expenses in Corporate Accounts .................................................................... 21

6 Findings Councillors Car Allowance ................................................................................................. 27

7

Findings Use of City Resources Related to Councillors .................................................................... 28

8 Findings Mayors Business Expense and Office Expense Accounts ................................................ 31

9 Findings Mayors Expenses in Corporate Accounts .......................................................................... 35

10 Findings Mayors Expenses Prior to December 1, 2010 ................................................................... 40

11 Findings Mayors Vehicle Expenses .................................................................................................. 48

12

Findings Use of City Resources related to the Mayors Office .......................................................... 49

Appendix A Scope of Review

Appendix B Letter from Mayor Susan Fennell

Schedules

Schedule 1 to Schedule 10 Councillor Term of Council Expense Transactions that do not comply, may notcomply or did not have sufficient information to determine compliance with Policy and Procedures

Schedule 1 Bob Callahan

Schedule 2 Vicky Dhillon

Schedule 3 Grant Gibson


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Schedule 10 John Sprovieri

Schedule 11 to Schedule 13, Mayors Office Expense Transactions that do not comply, may not comply

or did not have sufficient information to determine compliance with Policy and Procedures

Schedule 11 Mayors Business Expense and Office Expense Transactions

Schedule 12 Mayors Corporate Account Expense Transactions

Schedule 13 Mayors Expense Transactions from prior Term of Council

Schedule 14 Councillors Corporate Account Expense Transactions

Schedule 15 Community Events with Councillor Involvement


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1 Introduction and Background

1.1 Background

1. The City of Bramptons Council is composed of the Mayor and ten Councillors. Council is

the decision-making body for the City of Brampton (the City, City of Brampton orBrampton). It considers recommendations from its committees and makes decisionsabout matters that are local government responsibilities. The Mayor and the Councillorsincur various City-related expenses in carrying out their duties and responsibilities.

2. Following media reports with respect to expenses incurred by the Mayor and Councillors ofBrampton, City Council directed staff, at a Council meeting on November 20, 2013, todevelop terms of reference for a forensic examination of expenses of the Mayor andCouncillors to be undertaken by a third party forensic accountant.

3. The forensic examination would seek to validate expenses claimed for reimbursement bythe Mayor and the Councillors, and assess compliance with relevant expense policies,relevant procedures and the Code of Conduct for Members of Council. The examinationwould cover expenses incurred by the Mayor and Councillors during the current Term ofCouncil (December 1, 2010 to January 31, 2014) or earlier as required.

1.2 Retainer

4. After a competitive process was undertaken by the City of Brampton, Deloitte LLP(Deloitte) was retained in April 2014 to undertake the requested services.

5. Specifically, Deloitte was asked by City Council to complete an independent third partyexamination of the following:

a) Expenses of the Mayor and all Members of Council incurred during the current Term ofCouncil (December 1, 2010 up to January 31, 2014), or earlier as required, forexpenses specific to the City of Brampton and reported as part of the Citys financialstatements, including all Mayor and Member of Council expenses charged to:

i) Councillors Term of Council Expense accounts;

ii) Mayors Business Expense Accounts;

iii) Corporate Accounts; and

iv) Car allowances, city provided vehicle expenses and travel expenses.

b) Potential concerns related to the use of City resources for non-City business during thecurrent Term of Council only (December 1, 2010 up to January 31, 2014) to the extentpossible based on documentation available.


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9. The Mayor and Councillors Expense Policy dated February 9, 2011 (the 2011 ExpensePolicy) is applicable to transactions incurred by the Mayor and the Councillors afterFebruary 8, 2011.

10. Other relevant Policies, Procedures and By-Laws referenced in this report include but arenot limited to the following:

a) Expenses Travel effective date June 27, 2007 to February 8, 2011 (the 2007Travel Policy) applicable to the Mayor, Members of Council and all City staff whoincur individual travel expenses (and related Standard Operating Procedure);

b) Expenses Travel effective date February 9, 2011 (the 2011 Travel Policy)applicable to City staff (and related Standard Operating Procedure);

c) Expenses Business effective February 9, 2011 applicable to City staff (and related

Standard Operating Procedure);

d) The American Express Corporate Card Program Policies and Proceduresapplicable to the Councillors, the Mayor and the Mayors staff that signed theagreement.

e) Purchasing Card Policyeffective October 17, 2007 and June 1, 2012 applicable toCity staff.

f) Bank of Montreal Purchasing Card Agreement applicable to the Councillors, theMayor and the Mayors staff that signed the agreement.

g) Automobiles for Council & Senior Staff effective January 1, 2001 applicable to theMayor, the Councillors and identified Senior staff (and related Standard OperatingProcedures);

h) Expenses Professional Memberships (January 1, 2001 to February 8, 2011)applicable to Members of Council and all City Staff;

i) Expenses Professional Memberships effective February 9, 2011 applicable to CityStaff;

j) Statement of Remuneration & Expenses for Elected Officials (effective date January 1,2004);

k) Lunch and Dinner Sponsorship effective January 26, 2005 applicable to the Mayor,Councillors and City staff expenses incurred under the Community Lunch and DinnerEvent Sponsorship Program;

l) Community Use of Suite at BCSE policy effective October 15, 2001 applicable to theMayor and Members of Council;

m) Minor Charitable Donation Policy effective June 12, 2006;

n) City Wide Community Projects Funding policy effective October 1, 2001;o) Purchasing By-Law 193-2007 and 35-2012;

p) User Fee By-Law (380-2003); and

q) Code of Conduct for Members of Council of the City of Brampton effective since 2011.


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2 Summary of Findings

2.1 Introduction

11. After a competitive process was undertaken by the City of Brampton, Deloitte was retained

to examine the expenses of the Mayor and the Councillors and to examine the use of CityResources.

12. The forensic examination was conducted in accordance with the Terms of Referenceincluded in the Request for Proposal document issued by the City of Brampton.

13. City staff monitored the progress of the work of Deloitte throughout the engagement but didnot review a draft or final version of this report prior to its submission to the City Clerk.

2.2 Councillors Term of Council Expenses

14. The Terms of Reference for this aspect of the forensic examination required Deloitte toreview expenses incurred by the Councillors and recorded in their Term of CouncilExpense accounts during the current Term of Council (December 1, 2010 to January 31,2014) or earlier as required.

15. During our examination, we identified transactions in the Councillors Term of CouncilExpense accounts that did not comply with City of Brampton policies as summarized below:

16. We also identified transactions that may not comply with City of Brampton policies or didnot have sufficient information to determine compliance with City of Brampton policies assummarized below :

Breach

Description

Transaction

CountAmount

Expense Policy 154 28,038$

Amex / P Card Agreements 37 9,218 Note

Purchasing By-Law 1 8,695

Note: Gross amount before reimbursements of $8,918

Breach Transaction

Desctiption Count

Possible Breach Expense Policy 18 1,070$

Not Enough Information 92 12,831

Amount


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20. Personal Expenses: Expenses were submitted for payment by certain Councillors thatwere personal expenses unrelated to the business of the City of Brampton. For theseexpenses, the Councillors have either reimbursed the City or intend to reimburse the City.

21. Duplicate Expense Claims: Expenses were submitted by and reimbursed twice toCouncillors for the same expense. When we identified these transactions, the Councillorsindicated that they intended to repay the duplicate amount.

22. Law Society Fees and Liability Insurance: Annual Law Society Fees and ProfessionalLiability Insurance were reimbursed to a Councillor. In our opinion, the fees and liabilityinsurance are not eligible expenses under the 2011 Expense Policy.

23. Mileage Claims: Mileage claims were submitted and reimbursed to Councillors withoutreducing the mileage claim by 160 kilometres for each round trip to reflect the fact thatCouncillors receive a monthly car allowance for business use of their vehicles within an 80kilometre radius of City Hall.

24. Website Expenses: Expenses were submitted for a static website with content for the2010 re-election of a Councillor on the site. In our opinion, the expenses do not complywith the 2011 Expense Policy as the website activity does not relate to the business of theCity.

25. Membership Fees: Expenses were submitted by and reimbursed to a Councillor formembership fees for an organization that was not based in Brampton and therefore not acommunity membership as required by the 2011 Expense Policy.

26. Personal Purchases on American Express Corporate Card: The American ExpressCard was used by Councillors for personal purchases in breach of the American ExpressCorporate Card Program Policies and Procedures. These personal purchases wereidentified by the Councillors and reimbursed to the City typically within a month after thepurchase was made. All but one of these purchases has been reimbursed to the City.

27. Personal Purchases on City Purchasing Card:The MasterCard Purchasing Card wasused by Councillors for personal purchases in breach of the Purchasing Card Agreement.These personal purchases were identified by the Councillors and reimbursed to the Citytypically within a month after the purchase was made. All but one of these purchases has

been reimbursed to the City.

28. Breach of Purchasing By-Law 193-2007: We found a purchase in September 2011 forGarden Appreciation signs totalling $9,656 including taxes that did not comply with therequirements of Section 8.3 of the Purchasing By-Law 193-2007.

29. Souvenir Donations: Councillors could not provide information with respect to thebeneficiaries and purpose of some souvenir donations and, as a result, we did not haveenough information to determine whether the souvenir expense was in compliance with the2007 and 2011 Expense Policy.

30. Further details regarding the above noted expenses can be found in Section 4.

2.3 Councillor Expenses in Corporate Accounts

31. The Terms of Reference for this aspect of the forensic examination required Deloitte toreview expenses incurred by the Councillors and recorded in the Corporate Accountsduring the current Term of Council (December 1, 2010 to January 31, 2014) or earlier as


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33. During our examination, we identified Councillors transactions in the Corporate Accountsthat did not comply with City of Brampton policies as summarized below.

34. We also identified transactions that may not comply with City of Brampton policies or didnot have sufficient information to determine compliance with City of Brampton policies assummarized below.

35. Specific findings with respect to each Councillor can be found in Schedule 14 to this report.

36. A summary of the issues that were identified during the examination of transactions in theCorporate Accounts are as detailed below.

37. Per Diem Claims and Accommodations : Excess per diem claims, room service chargescovered by per diem claims, hotel upgrades and personal hotel charges were submitted byand reimbursed to Councillors contrary to the 2011 Expense Policy.

38. Tickets: Tickets were purchased for spouses and expensed to the City for events thatwere not on the Council approved list of dinner events (which specifically permits tickets tobe purchased for spouses to attend as guests of the City) contrary to the Lunch and DinnerSponsorship Policy.

39. PowerAde Suite Use: Some Councillors invited family members to attend events in the

PowerAde Suite contrary to the business purpose criteria of the Community Use of SuitePolicy. In some cases, the Suite was provided to individuals in the community that did notmeet the business purpose criteria of the policy. In other cases, the Councillors and staff inEconomic Development did not have a record of the community group and individuals thatused the PowerAde Suite for a particular event. On those occasions, we did not havesufficient information to determine whether the Suite was used in accordance with theCommunity Use of Suite Policy.

40. India Trade Mission: Three Councillors claimed daily per diems for a two week trademission to India despite an itinerary that detailed daily meals in the first week of the trip.

Given the itinerary, there was a possible breach of the 2011 Expense Policy related tosome of the lunch and dinner meal per diems that were claimed.


2.4 Use of City Resources Related to Counci llors

42 The Terms of Reference for this aspect of the forensic examination required Deloitte to

Expense Policy 4 452$

Amex Policies 1 364

Community Use of Suite Policy 12 4,500

Lunch and Dinner Sponsorship Policy 4 630

Breach

Description

Transaction

Count Amount

Breach Transaction

Desctiption Count

Possible Breach of Expense Policy 2 2,550$Not Enough Information 20 14,589

Amount


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groups was seen as support for economic development in the City of Brampton and as partof the Citys strategy for community engagement of its residents.

46. In 2012, a three-year plan was implemented to transition existing community groups from

no fee for service to full fees for equipment, facilities and services provided to their events.

47. During our examination, we found in-kind support provided to Community Eventsconnected to Councillors that were not approved in accordance with the City of BramptonMinor Charitable Donation Policy or its City Wide Community Projects Funding Policy.

48. The in-kind support was approved within City Departments contrary to City of Bramptonpolicies for Minor Charitable Donations and City Wide Community Projects Funding.

49. Specific findings with respect to each Councillor can be found at Schedule 15 to this report.

50. Only one event with significant in-kind services, Dreams take Flight 2012, was approved byCouncil.

51. Other events with notable in-kind support included Dreams Take Flight 2011 and 2013,Lucas Holtom event 2012 and 2013, Snelgrove Neighbourhood Watch Community Groupevent 2011, 2012 and 2013, Chinguacousy Lions Club Wing Fest 2011, 2012 and 2013and Pumpkin Party 2011 and 2012.

52. Further details regarding the above can be found in Section 7.

2.5 Mayors Business Expense and Office Expense Accounts53. The Terms of Reference for this aspect of the forensic examination required Deloitte to

review expenses recorded in the Mayors Business Expense accounts and the MayorsOffice Expense accounts during the current Term of Council or earlier as required.

54. Expense accounts in the Mayors Business Cost Centre include but are not limited to officeexpenses, vehicle costs, promotion, telephone, contracted services, Mayors Initiatives,communications, public relations and mobile communications.

55. Expense accounts in the Mayors Office Cost Centre include, based on the approvedbudgets, office expenses, outside service, non-personal vehicle rent, miscellaneous,mobile communications, community sponsorship and printer lease.

56. During our examination, we identified transactions in the Mayors Business Expense andOffice Expense accounts that did not comply with City of Brampton policies as summarizedbelow:

57. We also identified 72 transactions totaling $149,955 where we did not have enoughinformation to determine compliance with City of Brampton policies. Most of thesetransactions related to Driving Services for the Mayor as further described below.

58. Specific findings can be found in Schedule 11 to this report.

Breach

Description

Transaction

CountAmount


Amex Card Agreement 8 1,021 Note

Note: Gross amount before reimbursements of $900.


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61. Personal Use of Telecommunication Devices:We found minor telecommunicationexpenses submitted for reimbursement by the Mayor and Employee 2 that were personalexpenses unrelated to the business of the City of Brampton. Employee 2 has reimbursed

the City for the charges. The Mayor has advised that she has requested a credit from theservice provider for the charges and that it is forthcoming.

62. Driving Services:The Mayors Office did not have specific documented information fromthe supplier regarding day to day services and, as a result, we did not have enoughinformation to determine whether all contracted services were in compliance with the 2001Expense Policy and the 2011 Expense Policy.

63. Souvenirs:The Mayors Office could not provide information with respect to thebeneficiaries and purpose of some souvenir donations and, as a result, we did not haveenough information to determine whether the souvenir expense was in compliance with the

2011 Expense Policy.64. Further details regarding the above noted expenses can be found in Section 8.

2.6 Mayors Expenses in Corporate Accounts

65. The Terms of Reference for this aspect of the forensic examination required Deloitte toreview expenses incurred by the Mayor and Mayors staff recorded in the Corporate

Accounts during the current Term of Council or earlier as required.

66. Expenses in this category included:

a) Costs related to attendance at conferences held by the Association of Municipalities ofOntario (AMO) and the Federation of Canadian Municipalities (FCM),

b) The Corporations sponsorship and participation at community lunch and dinner events,c) The cost of tickets to events in the PowerAde Suite, andd) Expenses related to trade missions and other Economic Development Office

sponsored events.

67. During our examination, we identified transactions in the Corporate Accounts that did notcomply with City of Brampton policies as summarized below:

68. Specific findings with respect to the Mayor and the Mayors staff can be found in Schedule12.

69. A summary of the issues that were identified during the examination of the Mayor and theMayors staff transactions in the Corporate Accounts are as detailed below.

70 Use of Flight Passes: Flight passes were used by the Mayor and Mayors staff for travel

Breach

Description

Transaction

CountAmount

Expense Policy 91 71,924$ Note 1

Amex Card Agreement 2 212 Note 2

Notes

(2) Gross amount before reimbursements of $212

(1) Represents the cost of flight pass es. We have not deducted

the cost of economy fares to the related destinations.


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71. Business Class Airfare: We identified two instances of the Mayors staff purchasingbusiness class tickets. These purchases were reimbursed to the City within three monthsof the purchase.

72. Personal Purchases on American Express Corporate Card: The American ExpressCard had been used on one occasion each by the Mayor and Employee 4 for minorpersonal purchases in breach of the American Express Corporate Card Program Policiesand Procedures. These purchases were reimbursed to the City within one month and 18months respectively of the purchase.


2.7 Mayors Expenses Prior to December 1, 2010

74. The Terms of Reference for this aspect of the forensic examination required Deloitte toreview expenses incurred by the Mayor and the Mayors office prior to the current Term ofCouncil (prior to December 1, 2010) as required.

75. At the outset of our engagement, we met individually with each of the Councillors andheard concerns related to financial transactions and expenses incurred by the Mayor or theMayors staff. Concerns that could be evaluated through a review of supportingdocumentation were further examined, as reported in section 10 of this report.

76. During our examination, we identified transactions of the Mayor and the Mayors staff thatdid not comply with City of Brampton policies as summarized below:

77. We also identified transactions that may not comply with City of Brampton policies or did

not have sufficient information to determine compliance with City of Brampton policies assummarized below.

78. Specific findings can be found in Schedule 13 to this report.

79. A summary of the issues that were identified during the examination of the Mayor and theMayors staff transactions in the Prior Term of Council are as detailed below.

80. Use of Flight Passes: We identified a significant number of flight passes purchased andused by the Mayor and the Mayors staff. We have determined the use of flight passes tobe a breach of the 2007 Travel Policy. Our detailed discussion and analysis of the use offlight passes is located at Section 9 of this report.

Breach

Description

Transaction

CountAmount


Amex Card Agreement 50 30,863 Note

Note: Gross amount before reimbursements of $39,915

Breach

Description

Transaction

CountAmount

Possible Breach of Amex / PCard Agreements 5 5,848$

Not Enough Informaton 2 149


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Card Program Policies and Procedures. Included in the transactions was a $9,427reimbursement in June 2008 for a list of expenses which have been described to us by theMayor as relating to a performance in Miami Beach by the Brampton Symphony Orchestra

in February 2008. The transactions were paid by an external party (the Mayor SusanFennell Community Fund in this case) for the benefit of a third party (the BramptonSymphony Orchestra).


2.8 Use of City Resources Related to the Mayors Office

85. The Terms of Reference for this aspect of the forensic examination required Deloitte toinvestigate potential concerns related to the use of City Resources for non-City business

during the current Term of Council only (December 1, 2010 to January 31, 2014).86. Deloitte was to the review the issues to the extent possible based on available

documentation.

87. A summary of the issues that were identified during the examination of the Use of CityResources related to the Mayor are as detailed below.

88. Mayors Gala: We received a concern that resources of the Mayors office and other Cityemployees were being used to support the activities of the Mayors Gala, an annualfundraising event of Stepping Out for Brampton Inc. Based on the work performed, theMayors staff would appear to have minimal involvement in the activities of the Gala duringwork hours. We understand that most of the event planning, organization and execution ofthe event is performed by an external third party event management company.

89. Mayors Golf Classic: We received a concern that significant resources of the Mayorsoffice and other City employees were being used to support the activities of the MayorsGolf Classic, an annual fundraising event of Stepping Out for Brampton Inc. Based on thework performed, the Mayors staff would appear to have minimal involvement in theactivities of the Golf Classic. We understand that most of the event planning, organizationand execution of the event is performed by an external third party event managementcompany.

90. Community Spirit Team: We received a concern that significant resources of the Mayorsoffice were being used to support the activities of the Community Spirit Team, an initiativeof Stepping out for Brampton Inc., which operates a website and promotes Communityevents in the City of Brampton. Based on the work performed, the Mayors staff wouldappear to have little to no involvement in the activities of the Community Spirit Team.

91. Beatles tribute band Rain : We received a concern that the costs for the Beatles tributeband Rain which performed at the Mayors Gala in February 2013 were covered by acontract with the Rose Theatre at a cost to the City of Brampton. We were advised that the

contract file has no evidence of this.92. Mayors Open House / Reception : We received a concern that facilities, equipment and

services were provided in-kind to the Mayors Open House / Reception at the Rose Theatrein 2013. We were advised by Employee 19 that there were no fee waivers for the event.

93. Storage Units: We received a concern that storage units at a City of Brampton propertylocated at the south west corner of Glidden Road and Rutherford Road had been used bythe Mayor for the storage of personal effects and campaign material We were advised by


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2.9 Recommendations

96. We recommend the following:

a) Ongoing review of the expenses of the Councillors and the Mayors Office by Finance(started in 2014) to ensure compliance with expense policies and other corporatepolicies, corporate card agreements and purchasing by-laws.

b) Periodic training regarding expense policies and other corporate policies, corporatecard agreements and the purchasing by-law for the Councillors, the Council Office, theMayor and the Mayor Office.

c) Improved corporate record keeping in the area of expenses, souvenirs and use of thePowerAde Suite.

d) Improved accuracy in the recording of the Councillors and Mayors expenses byFinance given the public disclosure of this information.

e) Review of the information in Sections 5.2.7 and 5.2.8 of the Report by Finance and thecorrection of errors in the Annual Statement of Remuneration and Expenses for 2011.

f) Review of the information in Section 7 by City Council and changes to either the MinorDonation Policy or Departmental authorization practices to ensure alignment of Citypractices and policies for in-kind support.

g) Referral of the information in Schedule 15 (and Section 12.2.6) by City Council to the

Integrity Commissioner to consider whether the commitment of City resources in thecircumstances described in Section 7 would have required the Member of Councilconnected to the event to pursue such action through recommendation of Committeeand decision of Council.

h) Review of the information in Section 8.3.2 by Finance and the correction of errors in theMayors Business Expense and Office Expense accounts.


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3 Scope, Limitations in Scope andRestrictions

3.1 Scope

97. Our forensic examination covered the period December 1, 2010 to January 31, 2014 (theReview Period), except as noted herein, and was limited to the Scope of Issues describedin this report.

98. The Review Period and the Scope of Issues were based on the Terms of Referencedeveloped by the City of Brampton as included in the Citys Request for Proposal #2014-029.

99. Our procedures to address the Scope of Issues included a review of the City of Bramptonpolicies, procedures and Code of Conduct, accounting records, expense account records,invoices, email and other supporting documentation, interviews with the Mayor andCouncillors of the City of Brampton, interviews and discussions with certain Cityemployees, and a review of certain processes of the City.

100. The specific documents reviewed, individuals interviewed and procedures performed aredescribed inAppendix A to this report.

101. For purposes herein, all amounts are stated in CDN Dollars, unless otherwise stated.

3.2 Limi tations in Scope

102. Our examination was based on available documentation collected in the course of ourexamination and the interviews and discussions we conducted.

103. Our examination identified transactions for which we did not have sufficient information toconclude whether the expense was in compliance with City of Brampton policies. Thesetransactions are identified in Schedules 1 to 15 as applicable and are described in sections4 to 12 as applicable.

104. With respect to the Mayors expenses prior to December 1, 2010, available documentation

was often limited with regards to the specific transactions reviewed. Finance was not ableto locate all of the documentation related to specific transactions. The Mayor and theMayors staff provided additional information, but also indicated that they no longer had theinformation as it had been submitted to Finance.

105. To the extent that we receive additional information, our findings herein may requirerevisions.


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108. This Report is not intended for circulation or publication, nor is it to be reproduced for anypurpose other than as described herein, without our prior express written permission ineach specific instance. We do not assume any responsibility for losses incurred by anyparty as a result of circulation, publication, or reproduction of this Report contrary to theprovisions of this paragraph.

109. This Report has been based on information, documents and explanations that have beenprovided to us and therefore the validity of our conclusions rely on the integrity of suchinformation.

110. We reserve the right, but will be under no obligation, to review this Report, and if weconsider it necessary, to revise this Report in light of any information which becomesknown to us after the date of this Report.


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4 Findings Councillors Term of

Council Expense Accounts

4.1 Background

111. Guidance for the Councillors Term of Council Expense accounts is provided within the2011 Expense Policy and the 2007 Expense Policy.

112. The 2011 Expense Policy states that Each Councillor may incur eligible expenses which intheir judgment are of relevance to a Councillors role/duties, up to a maximum of $60,000per four-year term of Council.

113. The Councillors' Term of Council expenses are recorded in individual general ledgeraccounts for each Councillor and are posted on the City of Bramptons website.

114. The expenses recorded in the Term of Council Expense accounts over the periodDecember 1, 2010 to January 31, 2014 were as follows:

Callahan $44,834

Dhillon $53,222

Gibson $31,894

Hames $23,779

Hutton $54,425

Miles $33,595

Moore $44,047

Palleschi $32,931

Sanderson $38,725

Sprovieri $53,041

Councillor Expenses


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4.2 Findings

4.2.1 Compliance with Expense Policy and Procedure

115. During our examination, we identified transactions in the Councillors Term of CouncilExpense accounts that did not comply with City of Brampton policies as summarized below:

116. We also identified transactions that may not comply with City of Brampton policies or didnot have sufficient information to determine compliance with City of Brampton policies assummarized below.

117. Schedules 1 to 10 detail, by Councillor, these transactions.

118. We have provided below our findings with respect to the issues that were identified duringthe course of our examination of transactions in the Councillors Term of Council Expenseaccounts.

#

Trans.

Expense

Amount

Amount

Reimbursed

Callahan Sch 1 $16,470 14 $2,107 $1,879 $0

Dhillon Sch 2 $16 1 $218 $218 $0

Gibson Sch 3 $358 0 $0 $0 $4,348

Hames Sch 4 $553 5 $1,856 $1,856 $0

Hutton Sch 5 $5,369 0 $0 $0 $0

Miles Sch 6 $1,268 10 $3,558 $3,558 $0

Moore Sch 7 $774 1 $92 $92 $4,348

Palleschi Sch 8 $1,315 0 $0 $0 $0

Sanderson Sch 9 $1,357 6 $1,387 $1,315 $0

Sprovieri Sch 10 $558 0 $0 $0 $0

Total $28,038 37 $9,218 $8,918 $8,695

Purchasing

By-Law

Councillor Amex / P Card AgreementsSch.

Ref.

Expense

Policy

Callahan Sch 1 $650 $806

Dhillon Sch 2 $0 $714

Gibson Sch 3 $0 $0

Hames Sch 4 $0 $780

Hutton Sch 5 $420 $2,208

Miles Sch 6 $0 $1,007

Moore Sch 7 $0 $641

Palleschi Sch 8 $0 $1,078

Sanderson Sch 9 $0 $3,890

Sprovieri Sch 10 $0 $1,707

Total $1,070 $12,831

Possible Breach

Expense Policy

Not Enough

Information

Councillor Sch.

Ref.


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expenses. Many had assumed that the Finance Department had reviewed and approvedtheir expenses.

122. Employee 7 advised that since the beginning of 2014, Employee 9 has been reviewing and

approving the Councillor expenses.

4.2.3 Tickets

123. Councillors purchased event tickets to provide sponsorship to groups operating within theBrampton community or providing services to the citizens of Brampton. Tickets forsponsorship purposes are an eligible expense under the Community Involvement categoryof the 2011 Expense Policy.

124. We asked the Councillors for information about the use of tickets they purchased. The

information provided by the Councillors indicated that, in some cases, the tickets were notused in compliance with the 2011 Expense Policy.

125. Specifically, we found tickets purchased for events that were used by the Councillorsspouse and/or family members. The use of tickets by spouses and family members doesnot comply with the 2011 Expense Policy as the expense must be incurred in relation to thebusiness of the City.

126. We note that the Lunch and Dinner Sponsorship policy does permit the use of tickets byspouses for specific dinner events approved by Council, however, the costs of ticketsrecorded in the Councillors Term of Council Expense accounts are unrelated to these

approved events.

127. For example, we found in Councillor Huttons Term of Council Expense Account, a numberof tickets purchased for various events such as charitable dinners and Rose Theatreshows, for which he indicated that his spouse had used the second ticket that waspurchased.

128. In other cases, Councillors could not provide specific information with respect to who usedthe tickets and, therefore, we did not have enough information to determine whether theuse of the tickets was in compliance with the 2011 Expense Policy.

129. A number of Councillors advised Deloitte that the purchase of tickets was a long acceptedpractice at the City of Brampton. We understand that the Finance Department may haveapproved the purchase of tickets in the past based on the documentation provided whichtypically would not have indicated who used the purchased tickets.

4.2.4 Personal Expenses

130. We found expenses submitted for reimbursement by Councillors that were personalexpenses unrelated to the business of the City of Brampton. For these expenses, the

Councillor had either reimbursed the City or intended to reimburse the City.131. For example, Councillor Sanderson submitted hospital parking charges between December

2012 and May 2013 to the Finance department for reimbursement. In December 2013,Councillor Sanderson reimbursed the City of Brampton $328 for these charges.

4.2.5 Duplicate Expense Claims


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134. Councillor Callahan indicated that he intends to reimburse the City for the above notedtransaction.

4.2.6 Law Society Fees and Professional Insurance135. We found that the cost of annual fees of the Law Society of Upper Canada and

Professional Liability Insurance totaling $13,210.96 was reimbursed to Councillor Callahanand charged to his Term of Council Expense account in 2011 and 2012. In 2013, the costof annual fees of the Law Society of Upper Canada in the amount of $1,883.58 wasreimbursed to Councillor Callahan and charged to his Term of Council Expense account.Professional liability insurance fees for 2013 were not claimed.

136. We reviewed the 2011 Expense Policy and the seven Expense Types within the policy andidentified one Expense Type entitled Professional and Business Development underwhich the Law Society Fees and Professional Insurance might be an eligible expense.

137. The Law Society Fees and Professional Insurance would not appear to meet any of thelisted criteria for Professional and Business Development Expenses and, accordingly, wehave concluded that these fees are not an eligible expense.

138. Councillor Callahan responded in writing to our written question about the above notedexpenses indicating As city policy reads, membership fees are eligible under discretionaryfunds. I spoke to the Integrity Commissioner and City Treasurer about this expense andneither stated that it couldnt be done. In many occasions I have directed constituents in

matters of law pro bono.139. Based on email documentation obtained from the Finance Department, it would appear that

professional law fees and liability insurance were not permitted expenses under the 2007Expense Policy in the prior Term of Council.

140. As to the issue of memberships, the 2011 Expense Policy requires a membership to be acommunity membership to be an eligible expense. The Law Society of Upper Canada isthe self-governing body for lawyers and paralegals in Ontario and not a communitymembership of the City of Brampton.

4.2.7 Mileage Claims

141. The 2011 Expense Policy provides for the payment of mileage should Councillors elect todrive to a destination that is greater than 300 kilometres from Brampton in lieu of travelingby air or train.

142. The 2011 Expense Policy requires that mileage claims be based on the driving distancefrom City Hall to the destination location and the approved mileage rates in effect at thetime of travel. Councillors are required to reduce the mileage claim by 160 kilometres foreach round trip to reflect the fact that Councillors receive a monthly car allowance for the

business use of their vehicles within an 80 kilometres radius of City Hall.

143. We found Councillor mileage claims that were submitted and reimbursed without the 160kilometres reduction resulting in overstated claims.

144. For example, in December 2013 Councillor Miles submitted and was reimbursed for amileage claim of $711.92 for round trip travel to the National Safety Conference in Chicago;the claim did not include the required reduction of 160 kilometres


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4.2.9 Membership Fees

147. Community memberships that support the Brampton community are identified as eligibleexpenses under the Expense Type Community Involvement within the 2011 Expense

Policy.

148. We found expenses submitted for reimbursement by Councillor Hutton for membership inthe Alumni Association of the Niagara Park Commission which does not appear to be acommunity membership. Further, during our review, we noted that six years ofmembership fees were submitted for reimbursement during the current Term of Council.

4.2.10 Subscriptions

149. Subscriptions including but not limited to books, magazines and newspapers that are of

relevance to a Councillors' role/duties are eligible expenses under the 2011 ExpensePolicy.

150. We found expenses submitted for reimbursement and paid to Councillor Hutton forsubscriptions to publications that may not be relevant to the Councillors' duties. Examplesincluded Readers Digest, Walrus, National Geographic, and Canadas History. In ouropinion, the charges related to these subscriptions may not be in compliance with the 2011Expense Policy.

151. Councillor Hutton indicated the publications were relevant to his role as a Councillor.

4.2.11 407ETR Charges

152. Highway toll charges for business purposes are eligible expenses under the Miscellaneouscategory of the 2011 Expense Policy.

153. Councilor Hutton submitted 407ETR bills throughout the current Term of Council to theFinance department for reimbursement. In February 2014, Councilor Hutton reviewed his407ETR expenses and identified total charges of $414.19 related to personal trips on the407ETR over the period January 2011 through January 2014. Councillor Hutton has repaidthe cost of the personal trips on the 407ETR to the City of Brampton.

4.2.12 Breach of the American Express Corporate Card Program Polic ies andProcedures

154. The City of Brampton implemented a corporate card program with American Express formembers of Council and senior staff a number of years ago.

155. The Councillors that were issued cards under the program signed the American ExpressCorporate Card Program Policies and Procedures document. The document indicates that

The American Express card is to be utilized for the payment of expenses in connectionwith the conduct of City business only.

156. We found in our review of the Councillors Term of Council expenses that the AmericanExpress Card had been used for personal purchases in breach of the American ExpressCorporate Card Program Policies and Procedures by many of the Councillors. As theFinance Department pays the balance on the American Express Corporate Card on amonthly basis the Councillors were required to reimburse the City of Brampton for these


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159. As part of the Program, the Councillors that received a Bank of Montreal Purchasing Cardsigned an acknowledgement that the Card has been issued to them to make purchasesand approve payments required in the course of their duties.

160. We found in our review of the Councillors Term of Council expenses that the Bank ofMontreal Purchasing Card had been used for personal purchases in breach of the signedacknowledgement by a few of the Councillors.

161. Each of the transactions appears to have been reimbursed by the Councillors except forone transaction recorded in Councillor Callahans account for $224. Councillor Callahanindicated that he intends to repay the City.

4.2.14 Souvenir Donations

162. Throughout the current Term of Council, Councillors obtained from EconomicDevelopment, City souvenirs for donation to various community organizations, charitableevents, and fundraisers. Merchandise donations are permitted under the 2011 ExpensePolicy with dollar limits related to merchandise donations for religious and politicalorganizations.

163. We found that, in some instances, the souvenir requests did not identify the third partybeneficiary and the purpose of the donation. In our written questions to the Councillors, weasked for the name of the third party that received the souvenirs and the purpose of thedonation. For some transactions, Councillors could not provide information with respect to

the beneficiaries and purpose of the souvenir donation and, as a result, we did not haveenough information to determine whether the souvenir expense was in compliance with the2011 Expense Policy.

4.2.15 Breach of Purchasing By-Law 193-2007

164. We found a purchase recorded in the Term of Council Expense accounts of CouncillorGibson and Councillor Moore for the acquisition of Garden Appreciation signs in September2011. The cost of the signs was $9,656 and the cost was split between the accounts ofCouncillor Moore, the Regional Councillor for Wards 1 and 5 and Councillor Gibson, the

City Councillor for Wards 1 and 5 as the initiative was a shared expenditure for their wards.

165. Purchasing By-Law 193-2007 indicates that The acquisition of goods and/or services withan estimated value greater than $5,000.00 including taxes and less than 49,999.99including taxes shall be obtained using a competitive process. This process may behandled by the using department if they so desire, or by Purchasing. At least three (3)written or verbal quotes shall be obtained from those vendors registered in the City'sapproved vendor file or any other vendor known to provide the required goods and/orservices. Verbal quotes must be recorded. The user department shall prepare a report,accompanied by the quotations received indicating the selected vendor for purchase order

issuance or other appropriate action. Purchasing will review the supporting documentationfor completeness and compliance with the prescribed Policy and Procedures.

166. Based on information provided by Councillor Moore, we understand that:

a) Four companies were contacted to obtain a quote, two of which were not set up for thesize of sign requested. As a result, two quotes were obtained;

b) A t ith th i t t d f P h i d


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4.3 Other Matters

4.3.1 Management of Cell Phone Costs

168. Some Councillors arranged for temporary international phone packages on their City-issued cell phones while travelling to manage or minimize the cost of calls, emails and textmessages. The packages enabled Councillors to stay connected to City business and theirconstituents while travelling either for City business or personal purposes.

169. However, we noted several large monthly cell phone bills as a result of internationaltelephone calls, roaming and data charges and, accordingly, improvements could be madewith respect to cell phone management such as consistent use of international callingpackages as required.

170. We also observed that two Councillors incurred two monthly charges for maintaining twocell phones at the same time during the current Term of Council. Although this is permittedunder the 2011 Expense Policy, it would appear that extra costs were incurred that couldhave been avoided.

171. For one Councillor, Councillor Palleschi, we were advised that one cell phone was used forcalling while the second cell phone was obtained and used primarily for text messaging.

172. For another Councillor, Councillor Hutton, the Councillor initially advised us that the secondcell phone had been cancelled. He later advised that he was unaware that he wasincurring charges for two cell phones despite having signed the first page of the invoice toindicate his authorization for payment each month.

4.3.2 Expense Posting Errors

173. We observed a number of errors where souvenir costs and other expenses were chargedto the incorrect Councillor account.

174. For example, in August 2011, Councillor Sanderson incurred an expense of $200 to attenda Charity Golf Tournament. This expense, however, was included in Councillor CallahansTerm of Council expense account.

175. We also observed a number of transactions recorded in the current Term of Council thatrelate to transactions in the prior Term of Council.

176. For example, in January 2011, we noted a cheque requisition for third party printing coststhat was prepared for an invoice dated in June 2010. The expense was posted in thecurrent Term of Council when the expense was actually incurred in the prior Term ofCouncil. The expense affected the accounts of a number of Councillors.

177. Given the dollar term limit of $60,000 for Councillor Term of Council Expense accounts,Council Office and Finance Department procedures should be reviewed to ensureexpenses are posted to the proper Term of Council.

4.3.3 Reimbursements from Council lors

178. When the City has paid for an expense that later requires reimbursement from a Councillor,the full cash outlay including HST should be collected from the Councillor. We found on

i th Cit ll t d th i i t b f HST l th bl


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181. Councillor Hames advises that:

a) She was on vacation in Florida when she was asked by the City Manager to return toBrampton for a special Council meeting on February 25, 2009 requiring all Council

members to be in attendance. (An email from Employee 10 to Finance would appearto confirm the meeting and the required attendance of all Councillors.)

b) She had original flown to Florida using a flight pass that she purchased personally.

c) She was unable to use a personal flight pass to return to Toronto and a one way tickethad to be specifically purchased.

d) The personal flight pass credit for her return trip was not used and she did not get asubsequent credit for it.


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5 Findings Councillors Expenses

in Corporate Accounts

5.1 Background

5.1.1 Total Corporate Account Expenses

182. We met with Employee 7 to obtain information regarding the Corporate Accounts. We wereprovided with a memorandum that described the relevant Corporate Accounts to be asfollows:

a) Corporate Representation (Cost Centre 0192 account 201115)

b) Corporate Sponsorship (Cost Centre 0265/0267 account 200420)c) Corporate Trade Missions (multiple accounts)

183. For the purposes of our examination, we classified expenses in the Corporate Accountsinto the following four categories:

a) Corporate Representation,

b) Corporate Lunch and Dinner Sponsorship,

c) PowerAde Suite, and

d) Other Corporate.

184. The table below provides a summary of the expenses incurred by the 10 Councillorsrelated to each of the above noted categories over the period December 1, 2010 to January31, 2014.

Dec 2010 &

Jan - Dec

2011

Jan - Dec

2012

Jan - Dec

2013

Jan

2014 Total

Corporate representation $ 20,271.92 $ 21,113.84 $ 22,398.56 $ 0.00 $ 63,784.32

Corporate lunch and dinner sponsorship 20,333.15 30,287.68 14,918.66 - 65,539.49Pow erade suite 7,234.00 7,000.00 4,560.00 - 18,794.00

Other corporate 2,901.66 6,521.25 21,053.64 - 30,476.55

Total $ 50,740.73 $ 64,922.77 $ 62,930.86 $ 0.00 $ 178,594.36

5.1.2 Corporate Representation


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5.1.3 Corporate Lunch and Dinner Sponsorship

187. This category includes the cost of lunch and dinner events.

188. Each year, a Committee of Council Report entitled Business and Community Lunch andDinner Event Sponsorship Program is prepared setting forth a coordinated approach formanaging the Corporations sponsorship and participation at community lunch and dinnerevents. The Program sets forth a list of events that the City will participate in from both asponsorship and attendance perspective.

189. Policy 14.5.0 Lunch and Dinner Sponsorship is applicable to expenses incurred under theCommunity Lunch and Dinner Event Sponsorship Program. The Policy allows ElectedOfficials to obtain two tickets for dinner events and one ticket for lunch events. For dinnerevents, the guest ticket can be used by a family member, friend or other associate. If theElected Official is unable to attend, he/she is required to return the ticket(s) to the CouncilOffice Supervisor for distribution according to a guest protocol.

190. From December 2010 to December 2012, the Economic Development Office wasresponsible for the purchase and distribution of tickets to Corporate Lunch and Dinnersponsorship events. In January 2013, the procedure was revised and the Council OfficeSupervisor became responsible for the purchase and distribution of the tickets. In addition,beginning in January 2013 the Council Office was given a budget of $27,000, or $2,700 perCouncillor, to be used for the purchase of event tickets.

5.1.4 PowerAde Suite191. The City of Brampton rents Suite #121 at the PowerAde Centre which is available for public

use by Bramptons community groups at no charge subject to the provisions of Policy14.2.0 Community Use of Suite at BCSE (BCSE is the former name of the PowerAdeCentre).

192. According to Policy 14.2.0, the suite is to be used by Members of Council for the followingbusiness purposes only:

a) To support or sponsor the activities, including fundraising initiatives, of local community

groups;b) To recognize and promote the efforts and goodwill of community groups;c) To promote economic development; andd) As part of a rewards and recognition program for leaders in the community.

193. Community groups are defined as volunteer non-profit community groups located inBrampton, as well as registered charities whose services are available to Bramptonresidents.

194. The cost of tickets to events is charged to the Councillors booking the suite throughout theyear and at year end the costs related to the PowerAde Suite are publicly disclosed on a

per Councillor basis.

5.1.5 Other Corporate

195. This category includes expenses related to trade missions and other EconomicDevelopment Office sponsored events.


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5.2 Findings


197. We have provided, in the table below, a list of the City of Brampton Councillors and theirExpenses recorded in the Corporate Accounts over the period December 1, 2010 toJanuary 31, 2014:

Councillor Expenses

Callahan $11,363

Dhillon $36,746

Gibson $14,710

Hames $28,130

Hutton $8,105Miles $29,422

Moore $6,867

Palleschi $2,893

Sanderson $30,411

Sprovieri $9,945

198. During our examination, we identified Councillors transactions in the Corporate Accounts

that did not comply with City of Brampton policies as summarized below:

199. We also identified transactions that may not comply with City of Brampton policies or did

not have sufficient information to determine compliance with City of Brampton policies assummarized below.

Callahan $0 $0 $0 $50

Dhillon $392 $0 $0 $0

Gibson $0 $0 $2,000 $0

Hames $0 $0 $0 $0

Hutton $0 $0 $500 $50

Miles $60 $0 $0 $480Moore $0 $0 $0 $0

Palleschi $0 $0 $0 $0

Sanderson $0 $364 $0 $50

Sprovieri $0 $0 $2,000 $0

Total $452 $364 $4,500 $630

Councillor Expense

Policy

Amex

Policies

Comm unity Use

of Suite Policy

Lunch and Dinner

Sponsorship Policy

Callahan $0 $0

Dhillon $1 275 $7 329

Councillor Possible Breach

Expense Policy

Not Enough

Information


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200. Specific findings with respect to each Councillor can be found on Schedule 14.

201. We have provided below our findings with respect to the issues that were identified duringour examination of Councillors transactions in the Corporate Accounts.

5.2.2 Breach of 2011 Expense Policy - Per Diem Claims and Accommodations

202. We found during the course of our examination, excess per diem claims made byCouncillors related to the AMO and FCM conferences.

203. For example, Councillor Dhillon claimed meal per diems and unaccountable per diems for 4days at FCMs Standing Committee Meetings in Prince George, B.C. for the period March5thto March 8th, 2013. Mr. Dhillons hotel bill indicated that he arrived in Prince George onMarch 6thand left on March 8th, 2013 making him eligible for 3 days of per diems and not 4

days.204. Councillor Dhillon also claimed meal per diems and unaccountable per diems for 4 days for

the FCM Vancouver conference for the period May 30 to June 2, 2013. The hotel billcharged to the Corporate Representation account includes In Room Dining andRefreshment Centre charges covered by the meal and unaccountable per diem resulting ina duplicate claim for these items.

205. We also found, on the same trip for Councillor Dhillon, a room upgrade charge of $50 pernight plus tax at the Fairmont Hotel Vancouver on the second and third nights of this threenight stay as he moved from room 367 to room 933. The Expense Policy indicates that

Councillors will be reimbursed for the reasonable cost of hotel accommodations providingbest value available at the time of making travel arrangements. The room upgrade wouldnot appear to be consistent with this policy.

5.2.3 Tickets for Spouse Event not on Approved List for Lunch and DinnerSponsorship

206. In 2013, several Councillors obtained tickets for the Carabram opening ceremonies throughthe Economic Development Office.

207. We were advised by certain Councillors that tickets were provided to their spouses toattend the event with them.

208. The Carabram event is not on the approved list of Lunch and Dinner sponsorship and, as aresult, Policy 14.5.0 Lunch and Dinner Sponsorship would not be applicable. Accordingly,the tickets used by spouses would not comply with City of Brampton policies, as the cost ofthe tickets do not relate to the business of the City.

5.2.4 PowerAde Suite Used Contrary to Community Use of Suite Policy

209. We found during the course of our examination that on several occasions the PowerAdeSuite was not used as required by Policy 14.2.0 Community Use of Suite at BCSE.

210. For example, on several occasions Councillor Sprovieri provided tickets to the PowerAdesuite to the same resident. We reviewed email correspondence between the resident,Councillor Sprovieri and Employees 11 and 12 with respect to the tickets requested forhockey games which indicates that the tickets are for personal use and not for charity,


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213. We followed up with the Councillors through written questions and through interviews todetermine who used the suite for each specific instance. In certain cases, Councillors couldnot provide information with respect to how the tickets were used but rather indicated thatthey would have brought members of the community.

214. In our opinion, their answers did not provide sufficient information for us to determine if theuse of the Suite #121, on those occasions, complied with Policy 14.2.0 Community Useof Suite at BCSE.

5.2.6 India Trade Mission

215. We reviewed the meal and unaccountable per diem claims for Councillor Dhillon andCouncillor Miles recorded in the Corporate Accounts related to the India Trade Mission in2013. Prior to the trip, both Councillors claimed 15 day meal and unaccountable per diems

for the trip from January 2 to January 16, 2013 totaling $1,275 each.

216. We asked both Councillors in writing to provide an itinerary for the trip and to confirm thatthere were no meals provided by others as part of the trip.

217. Both Councillors acknowledged that some meals were provided throughout the trip. Ourreview of the itinerary indicates that during the first week of the trip, from Thursday January3, 2013 to Wednesday January 9, 2013, there were 5 lunches or lunch receptions and 5dinners or dinner receptions some at hotels such as the Meridien Hotel. However, bothCouncillors indicated that due to dietary issues, they had to purchase or supplement theirown meals.

218. We also interviewed Councillor Sprovieri who participated in the India Trade Mission andfiled a 15 day per diem meal and unaccountable per diem claim of $1,275 in his Term ofCouncil Expense account. Councillor Sprovieri stated to Deloitte that he paid for his owndinners during the trip as the dinners on the itinerary occurred too late in the evening andfor health reasons he needed to eat earlier. He also stated that he attended the offeredlunches and was prepared to return any per diem that was paid improperly.

219. Given the itinerary provided by Councillor Dhillon and Councillor Miles and the statedpurpose of the trip as a trade mission, we are of the opinion that there may have been a

breach of the 2011 Expense Policy related to some of the lunch and dinner meal per diemsthat were claimed.

5.2.7 Errors in Reporting of Corporate Lunch and Dinner Sponsorship

220. The Annual Statement of Remuneration and Expenses for 2011 indicates a total of $20,333was incurred related to the Councillors attendance at Corporate Lunch and Dinner events.

221. During our examination, we observed that the total of $20,333 agreed to the summaryprovided by the Economic Development Office, however, the cost for each Councillor

reported in the Annual Statement of Remuneration and Expenses were not presentedcorrectly.

222. For example, the Annual Statement of Remuneration and Expenses for 2011 indicates thatCouncillor Palleschi incurred an amount of $5,532.20 to reflect the cost of his participationwhen the actual amount he incurred, as determined by Economic Development, was$333.75.


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226. For example, in 2011 Councillor Moore attended the Peel Crime Stoppers Chiefs Dinner,however, no cost was reported. In 2012, Councillor Sanderson obtained two tickets toattend the Mayors Gala at a cost of $1,000 however, the cost was not reported.

227. As stated above, we recommend that Finance correct the errors in the Annual Statement ofRemuneration and Expenses for 2011 and post the revised statements on the Cityswebsite.


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6 Findings Councillors Car

Allowance

6.1 Introduction228. Each Councillor is entitled to a car allowance amount pursuant to Corporate Policy 13.1.0

entitled Automobiles for Council & Senior Staff. The car allowance amount is paid monthlyto the Councillors by the City of Brampton Payroll Department.

229. The Councillors monthly car allowance payments are recorded in Cost Centre 0115 Council Members, Account 200239 in the General Ledger for the City of Brampton.

230. Each year the City of Brampton budgets for the Councillors car allowance payments.

231. We compared the total car allowance expenses recorded in the General Ledger to theamount recorded in the GABE Budget System for Cost Centre 0119. We observed that thetotal amount budgeted for 2012 and 2013 was higher than the amount paid to theCouncillors in these years. In both cases, the budgeted amount was $135,000.

232. We asked the Finance Department about this and we were advised that the budgetedamount was presented incorrectly as it reflected the amount that would be paid to 11Councillors instead of 10 Councillors.

6.2 Expenses Incurred

233. Based on the Annual Statement of Remuneration and Expenses, the car allowanceexpense reported for Councillors over the period December 1, 2010 to January 31, 2014were as follows:

Allow ance per

Councillor

Allowance for all

Ten Councillors

January 2014 Monthly $ 1,040.40 $ 10,404.00

2013 Yearly 12,484.81 124,848.10

2012 Yearly 12,300.24 123,002.40

2011 Yearly 11,941.92 119,419.20

December 2010 Monthly 969.94 9,699.40

234. We agreed the amounts presented in the Annual Statement of Remuneration andExpenses statement to the General Ledger detail. No differences were identified.


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7 Findings Use of City Resources

Related to Councillors

7.1 Terms of Reference235. The Terms of Reference for this aspect of the Forensic examination required Deloitte to

investigate potential concerns related to the use of City Resources for non-City businessduring the current Term of Council only connected to the Councillors (this section) or theMayor and Mayors Office (Section 12).

236. Deloitte was to review the issues to the extent possible based on available documentation.

237. The Terms of Reference indicated that City Resources used for non-City business is notrecorded in the General Ledgerof the City of Brampton.

238. For purposes of this report:

a) City Resources were defined to be facilities, equipment, technologies and labour of CityBrampton employees, and

b) Non-City business was defined to be any third party such as a Not for profit, charity,business, or individual directly or indirectly supported by a Councillor or the Mayor.

239. Our examination focused on situations where City resources were provided withoutcharging user fees to a non-City business.

7.2 Background

240. The City of Brampton has a Code of Conduct for the Members of Council which providesguidance to Councillors on a number of issues including the use of City Resources (Section2.0, 3.1, 3.3, 3.3 and 3.4). In particular, Section 3.3, Commitment of City Resources,indicates Council, as a whole, is responsible for decisions that direct staff and establishthe parameters for use of corporate resources to address municipal issues and provideservices. For tasks or actions that require the commitment of significant staff time and/orCity resources, Members will pursue such action through recommendation of Committee

and decision of Council.241. The City of Brampton also has a series of policies applicable to the Citys support for

events planned by community groups and charitable organizations. These policies include:

a) Minor Charitable Donation Policy 14.1.0,

b) Use of Community Suite, Corporate Policy 14.2.0,


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7.3 Findings

7.3.1 Introduction

244. City Staff advised that the City of Brampton had previously provided community groups witha high level of services and equipment rentals to deliver their events without charging userfees (in kind support). This included services, equipment rentals and facilities of ParkOperations, Recreation and the Rose Theatre.

245. The provision of in-kind services to community groups was seen as support for economicdevelopment in the City of Brampton and as part of the Citys strategy for communityengagement of its residents.

246. In 2012, a plan was implemented to transition existing community groups from no fee for

service to full fees for equipment and services provided to their events.247. A single point of contact was identified within the Recreation Department to deal with

community groups. Councillors that supported community events directly or indirectly wereasked to have the community group representative contact Employee 13 to ensureconsistent treatment of community groups.

248. In terms of approval of user fee waivers or in-kind support, City staff advised that requestedsupport for an event in excess of $5,000 would be documented in a report and sent toCouncil for approval. For user fee waivers or in-kind support less than $5,000, we wereadvised that the requests were approved within the department at the Commissioner level.

249. We note that this Departmental authorization policy would appear to conflict with City ofBrampton policies for Minor Charitable Donations and City Wide Community ProjectsFunding and the requirement for authorization of in-kind support by individuals outside ofthe Department.

7.3.2 Community Events

250. Information regarding in kind support provided to Community Events in the City ofBrampton over the period December 1, 2010 to January 31, 2014 connected directly or

indirectly to a Councillor can be found at Schedule 15.

251. This schedule is based on information provided to us by the Councillors and by theRecreation Department, Park Operations and the Rose Theatre.

252. We have provided below our findings with respect to the issues that were identified duringthe course of our examination of Community Events.

7.3.3 Approval for In-Kind Support

253. Based on our examination of the events in Schedule 15, it would appear that only oneevent with in-kind support (Dreams Takes Flight 2012) was approved by Council as a MinorCharitable Donation.

254. All other in-kind support was approved within a City department contrary to City ofBrampton policies for Minor Charitable Donations and City Wide Community ProjectsFunding.


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7.3.4 Counci l Office Assistants

257. We provided written questions to Council Office Assistants to ask about the level of servicethey provided to Community Events and groups connected to the Councillor that they

worked for. The responses ranged from no support to very limited support (a few hours ayear) for community events. In one case, a Council Office Assistant obtained approvalfrom Employee 14 for her support of a local charity and their charitable activities.

258. Based on our examination, there was no evidence or documentation to suggest that anyCouncil Office Assistant was using a significant amount of her work time in support ofCommunity Events.


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8 Findings Mayors Business

Expense and Office ExpenseAccounts

8.1 Background

259. Guidelines for the Mayor Business Expense Accounts are provided within the 2011Expense Policy. For expenses incurred between December 1, 2010 and February 9, 2011,the 2001 Expense Policy was the policy applicable to the Mayor (and to City staff).

260. The Guidelines indicate that the Mayor is provided with an annual budget within theMayors Business Cost Centre in recognition of the Mayors responsibilities as the Head ofCouncil. The budget is established as part of the Citys annual budget process.

261. The Guidelines specifically state The Mayor may incur expenses in the Mayors BusinessCost Centre, which in the judgment of the Mayor are of relevance to the roles/duties of theMayor.

262. Expense accounts in the Mayors Business Cost Centre (Cost Centre 116) include but arenot limited to office expenses, vehicle costs, promotion, telephone, contracted services,Mayors Initiatives, communications, public relations and mobile communications.

263. In addition, the Mayor is provided with an annual budget within the Mayors Office CostCentre. The budget is established as part of the Citys annual budget process.

264. Expense accounts in the Mayors Office Cost Centre (Cost Centre 121) include, based onthe approved budgets, office expenses, outside service, non-personal vehicle rent,miscellaneous, mobile communications, community sponsorship and printer lease.

265. The following table details the actual non-salary expenses recorded in the MayorsBusiness and Mayors Office Cost Centres over the years 2010 to 2013:

Budget Actual Budget Actual Budget Actual Difference

2010 $ 111,100 $ 100,134 $ 96,107 $ 95,217 $ 207,207 $ 195,351 $ 11,856

2011 111,100 88,256 96,050 93,009 207,150 181,265 25,885

2012 111,220 81,444 86,050 82,455 197,270 163,899 33,371

2013 101,120 92,114 96,150 85,805 197,270 177,919 19,351

Year

Mayor's Business Mayor's OfficeTotal

Cost Centre 116 Cost Centre 121


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8.2 Findings


266. During our examination, we identified transactions in the Mayors Business and MayorsOffice accounts that did not comply with City of Brampton policies as summarized below.

267. We also identified transactions that did not have sufficient information to determinecompliance with City of Brampton policies as summarized below.

268. These transactions are detailed in Schedule 11.

269. We have provided below our findings with respect to the issues that were identified duringthe course of our examination of transactions in the Mayors Business Expense and OfficeExpense accounts.

8.2.2 Review and Approval of Expenses

270. Prior to the current Term of Council, the Finance Department was involved in the review

and approval of the Mayors Business Expenses and Office Expenses to ensure submittedexpenses were in compliance with City of Brampton expense policies and procedures.

271. When the 2011 Expense Policy became effective in February 2011, the Mayor (and theCouncillors) became responsible for the approval of her own expenses. We are advisedthat the Finance Department, at this time, ceased reviewing the Mayors BusinessExpenses and Office Expenses to ensure submitted expenses were in compliance with the

#

Trans.

Expense

Amount

Amount

Reimbursed

Mayor Fennell $2,067 5 $515 $515

Employee 1 $0 1 $54 $54

Employee 2 $239 0 $0 $0

Employee 3 $0 1 $121 $0

Employee 4 $0 1 $331 $331

Total $2,306 8 $1,021 $900

Individual Expense

Policy

Amex / P Card Agreements

Mayor Fennell $39

Mayor's Office $144,150

Employee 2 $1,056

Employee 3 $4,075

Employee 6 $634

Total $149,955

Individual Not Enough

Information


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Expense accounts, or in an accounts receivable account set-up to track transactions thatare to be reimbursed by City Staff, the Mayor and Councillors.

273. For example, we found a charge from a Montreal hotel on the January 2012 Amexstatement of Employee 4. Employee 4 confirmed that this was for a personal hotel stayand that the City-issued Amex had been used by mistake. The charge and the June 2012reimbursement of the expense by Employee 4 were recorded in the accounts receivableaccount.

274. Employee 3 used the card for a $121 personal purchase. Employee 3 advised a personalcheque was attached to the expense report with this charge. The reimbursement was notrecorded in the Mayors Business and Office Expenses.

8.2.4 Use of Flight Passes (1 transact ion totalling $1,847)

275. During our examination, we identified one return flight by Mayor Fennell using flight passesat a cost of $1,847. We have determined the use of flight passes to be a breach of theapplicable expense policies with this specific flight pass in breach of the 2011 ExpensePolicy. Our detailed discussion and analysis of the use of flight passes is located atSection 9.2 of this report.

8.2.5 Personal Use of Telecommunication Device (11 transact ions totalling $459)

276. We found telecommunication invoices submitted for reimbursement by the Mayor and

Mayors staff that included expenses unrelated to the business of the City of Brampton.277. This included two amounts repaid by Employee 2 ($197.02 and $42.31) and third party

charges incurred by the Mayor from May 2012 to November 2012 ($220). The Mayor hasinformed us that the telecommunication company will credit her account for the cost ofthese expenditures (IQ Quizzes).

8.2.6 Driving Services (38 transactions totalling $144,150)

278. The Mayors Office budget includes an amount (ranging from $47,000 to $49,000 from

2010 to 2013) related to outside services. More specifically, this relates to a contract withTotal Eclipse Limousine Service for the provision of driving services for Mayor Fennell.

279. We reviewed contracting documents provided to us by Finance and make the followingobservations:

a) The services have been procured by way of a Purchase Order, which has beenmodified or amended by way of Purchase Order increases and change orders for aperiod of approximately eight years. We have not been provided with a copy of theoriginal Purchase Order and increases, but have received copies of Change Orders #1to #9 covering the period of our examination.

b) The Change Orders indicate that the cost of the services, on a yearly basis, is $45,000plus applicable taxes ($3,750 per month) to provide driving/aid services to the Office ofthe Mayor on a 24 hour 7 days a week basis, further indicating that Driver and vehicleto be available on an as needed basis (on call) and ability to alter schedule as needed.

c) We understand, from discussion with the Mayor, that the driving/aid services include


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driving/aid services. There is no information provided as to the actual level of serviceprovided (i.e. report with dates, times, duration and location of services).

281. We asked the Mayor and her office staff about reports provided by Total Eclipse LimousineService, and we were advised that they have never asked for reports nor have they beenprovided with reports by the service provider.

282. As a result, we do not have sufficient information to determine what services were providedby Total Eclipse Limousine Service (i.e. ability to determine the frequency of servicesprovided, that all services were related to City business rather than personal business, orthat the services were provided solely for the Mayor). Therefore, we are not able todetermine compliance of these transactions with the 2001 Expense Policy and the 2011Expense Policy.

8.2.7 Souvenir Donations (25 transact ions totalling $4,290)283. Throughout the current Term of Council, various staff within the Mayors office obtained

from Economic Development, City souvenirs for donation to various communityorganizations, charitable events, and fundraisers.

284. We found that, in some instances, the souvenir requests did not identify the third partybeneficiary and the purpose of the donation. In our written questions to the Mayor and theMayors staff, we asked for the name of the third party that received the souvenir and thepurpose of the donation. For some transactions, staff within the Mayors office could notprovide information with respect to the beneficiaries of the souvenir donation. Further, we

have been advised that some of the souvenir purchases are to establish or replenish aninventory of items, usually at the beginning of summer, and that no inventory listing or logwas maintained to track the use of the souvenirs. As a result, we did not have enoughinformation to determine whether the souvenir expense incurred was in compliance with the2001 Expense Policy and the 2011 Expense Policy.

8.3 Other Matters

8.3.1 Management of Telecommunication Costs285. We noted several large monthly bills (as high as $1,156 per month) as a result of

international telephone calls, roaming and data charges and, accordingly, improvementscould be made with respect to cell phone management such as international callingpackages as required.

8.3.2 Expenses not Posted to Mayors Business Expense Accounts

286. We found transactions where travel costs incurred by the Mayor and the Mayors staff were

charged to the Corporate Representation account rather than to the Mayors BusinessExpense accounts.

287. Specifically, in 2013 the Mayor and Employee 5 attended an Alberta Association ofMunicipal Districts and Counties Conference in Edmonton and the Atlantic MayorsCongress in Halifax. The costs of attending these conferences, other than the flight costs,were recorded in the Mayors Business Expense accounts.


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9 Findings Mayors Expenses in

Corporate Accounts

9.1 Background290. We met with Employee 7 to obtain information regarding the Corporate Accounts. We were

provided with a memorandum that described the relevant Corporate Accounts to be asfollows:

a) Corporate Representation (Cost Centre 0192 account 201115),b) Corporate Sponsorship (Cost Centre 0265/0267 account 200420), andc) Corporate Trade Missions (multiple accounts).

291. For purposes of our review, we classified expenses in the Corporate Accounts into the

following four categories:

a) Corporate Representation,b) Corporate Lunch and Dinner Sponsorship,c) PowerAde Suite, andd) Other Corporate.

9.1.1 Total Corporate Account Expenses

292. The table below provides a summary of the expenses incurred by the Mayor and the

Mayors staff related to each of the above noted categories over the period December 1,2010 to January 31, 2014.

Dec 2010 &

Jan - Dec

2011

Jan - Dec

2012

Jan - Dec

2013

Jan

2014 Total

Corporate representation $ 35,874.41 $ 29,963.40 $ 49,085.55 ($ 3,030.66) $ 111,892.70

Corporate lunch and dinner sponsorship - 137.14 - - 137.14

Pow erade suite - - - - -

Other corporate - 23,259.93 30,891.95 - 54,151.88Total $ 35,874.41 $ 53,360.47 $ 79,977.50 ($ 3,030.66) $ 166,181.72

293. The description and nature of expenses in the categories of Corporate Representation,Corporate Lunch and Dinner Sponsorship, PowerAde Suite and Other Corporate can befound at Sections 5.1 of this report, as well as the applicable policies and procedures.


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9.2 Findings


294. During our examination, we identified transactions of the Mayor and the Mayors office inthe Corporate Accounts that did not comply with City of Brampton policies as summarizedbelow.

295. The above noted transactions are detailed in Schedule 12.

296. We have provided below our findings with respect to the issues that were identified duringthe course of our examination of the transactions in the Corporate Accounts.

9.2.2 Breach of Expense Policy Use of Flight Passes (89 transactions totalling$70,615)

297. Since at least March 2008, the Mayor and the Mayors staff have used flight passes fromAir Canada for the majority of their air travel. According to Mayor Fennell, flight passeswere purchased as they represented the best fare available for their travel requirementsand provided the required flexibility in terms of change fees (none being incurred throughthe use of flight passes) and cancellations.

298. The Mayors travel over this time was subject to the 2007 Travel Policy and the 2011Expense Policy while the Mayors staff travel was subject to the 2007 Travel Policy and the2011 Travel Policy.

299. Both the 2007 and 2011 Travel Policy indicates that the City will pay air/train fare based onreceipts submitted to a maximum of the regular economy airfare rate.

300. The 2011 Expense Policy indicates that the City will pay air/train fare based on economyclass or at the best rate available at the time of making travel arrangements. Exceptionswill be made if the Mayor or Councillor requires alternate arrangements due to personal

health conditions or medical restrictions or for flights greater than five hours in duration.301. Based on our examination, we found the cost of flight passes used by the Mayor and the

Mayors staff to exceed the economy airfare rate contrary to the 2007 and 2011 TravelPolicy and the 2011 Expense Policy.

#

Trans.

Expense

Amount

Amount

Reimbursed

Mayor Fennell $26,327 1 $36 $36

Employee 1 $5,078 0 $0 $0

Employee 2 $11,250 0 $0 $0Employee 3 $14,243 0 $0 $0

Employee 4 $4,786 1 $176 $176

Employee 5 $10,240 0 $0 $0

Total $71,924 2 $212 $212

Individual Expense

Policy

Amex / P Card Agreem ents


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302. Specifically, we found the cost of flights by the Mayor and Mayors staff using flight passesto be more expensive than economy fare tickets purchased by Councillors and staff for thesame destination and events (includes cost of change fees) summarized in the followingtable (for each event that could be compared):

Use of Flight Pass Purchase of TicketCost

DifferencePer TripYear

TravelLocation # Trips

TotalCost

AverageCost # Trips

TotalCost

AverageCost

2011 Halifax 58,813

$1,763 42,420

$605 $1,157

2012Ottawa(August)

21,465 733

31,378 459 273

2012Ottawa(November)

79,586 1,369

1418 418 951

2012 Saskatoon 59,235 1,847

54,152 830 1,017

2013 Vancouver 59,586 1,917

53,690 738 1,179

2013 Prince George 35,751 1,917

21,590 795 1,122

303. Based on documentation going back to March 2008, the Mayors Office has purchasedeleven (11) different flight passes; eight (8) flight passes were for multiple travelers, two (2)flight passes were solely for the use of the Mayor and one (1) flight pass was solely for theuse of Employee 2. The flight passes were comprised of 10 or 30 one-way flight credits.

304. Seven (7) flight passes were at the Latitude level. The Latitude flight passes are not thelowest priced flight passes avai

forensic audit of brampton mayor and councillors

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